Mercedes (Daimler), Volkswagen (Audi, Porsche) & BMW

Collusive Emissions-Reducing Practices Since the 1990’s Alleged

On July 24, 2017, The Wall Street Journal reported that

[t]he latest allegation is that Volkswagen, Porsche and Audi-all owned by the Volkswagen Group-together with Mercedes-maker Daimler and BMW have engaged in collusive practices since the 1990s, including on emissions-reducing technology linked to the VW fraud revealed by the U.S. Environmental Protection Agency in 2015. The European Union’s top antitrust regulator has confirmed that it is  investigating the industry following a tipoff from VW last year. More than (EURO)11 billion ($12.8 billion) has been wiped off the combined market value of the three listed groups since the weekly magazine Der Spiegel  published details of what it labeled “the cartel” on Friday.

The Der Spiegel report describes how teams from each of the big five German car makers met to coordinate answers to questions posed by new technology or regulations. Notably, a crucial component for the reduction of noxious nitrogen-oxide emissions from diesel engines was allegedly downscaled for commercial reasons. This eventually led VW and Audi to pass tougher U.S. tests by cheating.

Diesel Emissions – Secret Cartel Allegedly Formed

On July 24, 2017, The Verge reported that

. . . Der Spiegel published an explosive report alleging that the major German automakers formed a secret cartel in the 1990s to collude on diesel emissions. These companies, including Volkswagen, Audi, BMW, Porsche, and Daimler, met in secret working groups to discuss “the technology, costs, suppliers, and even the exhaust gas purification of its diesel vehicles,” the German weekly reported. The meetings were disclosed to German competition officials in letters from VW and Daimler and viewed by Der Spiegel.

The Verge further reported that

[t]he secret meetings “laid the basis” for the 2015 diesel emission cheating scandal, in which VW was caught installing secret software in more than half a million vehicles sold in the US that it used to fool exhaust emissions tests. The admission of cheating ultimately cost the automaker tens of billions of dollars in fines and legal fees, making it one of the most expensive corporate scandals in history.

Years earlier, VW participated in dozens of secret meetings with its competitors, involving over 200 employees in up to 60 working groups, on how to meet increasingly tough emissions criteria in diesel vehicles. The automakers may have colluded to fix prices of a diesel emission treatment called AdBlue through these working groups, Der Spiegel says. Specifically, VW (which owns Porsche and Audi), Daimler (which owns Mercedes-Benz and Smart), and BMW allegedly agreed to use AdBlue tanks that were too small. AdBlue is a liquid solution used to counteract a vehicle’s emissions.

. . .

More recently, Mercedes Benz-parent company Daimler has recalled some 3 million cars for a software update designed to reduce diesel emissions. The German government ordered Daimler to appear before a commission after local media reported that prosecutors were investigating possible emissions cheating by the auto giant. 

Meanwhile, VW subsidiary Audi on Friday recalled up to 850,000 vehicles fitted with a similar software update. The news of the recalls, and of the widening scope of the scandal, comes as many global car companies have announced expanded plans for hybrid and electric vehicles.

Volkswagen, Daimler & BMW – Decades of Collusion Alleged

On July 25, 2017, The New York Times reported that

[o]n Saturday, the German magazine Der Spiegel reported that for decades Volkswagen, Daimler and BMW had colluded to hold down the price of key technologies, including emissions equipment. Among other things, Der Spiegel said, the carmakers agreed in 2006 to limit the size of tanks used to hold a liquid required to neutralize nitrogen oxide fumes.

At least for Volkswagen and its Audi division, the tanks were not big enough to adequately purify the emissions without frequent refills.

Volkswagen and Audi have admitted in court documents that rather than inconvenience owners, they rationed the fluid and allowed the cars to spew more nitrogen oxides than allowed. Daimler and BMW have denied wrongdoing. 

Though unproven, the accusations of collusion among the automakers are being taken seriously. The European Commission and the Federal Cartel Office in Germany said they would look into the Spiegel report.

Diesel Emissions – Daimler Summoned To Appear Before A Commission

On July 13, 2017, CNN Money reported that

[t]he German government summoned Daimler to appear before a commission on Thursday after local media reported that prosecutors were investigating possible cheating on emissions tests. 

German newspaper Sueddeutsche Zeitung reported on Wednesday that prosecutors were investigating two engines used in over 1 million cars sold in the U.S. and Europe. 

CNN Money also reported that

[t]he commission that Daimler . . . will appear before Thursday was established in 2015 to investigate Volkswagen’s . . . diesel scandal. 

The German automaker has admitted to fitting as many as 11 million diesel vehicles worldwide with software that could cheat nitrogen oxide emissions tests. 

On July 13, 2017, Fortune reported that

[t]he committee of German lawmakers investigating the Volkswagen emissions scandal has summoned German carmaker Daimler for an extraordinary meeting to address allegations it sold cars with excessive emissions.

Germany’s Sueddeutsche Zeitung, citing a search warrant issued by a Stuttgart court, had reported Wednesday that prosecutors were examining the possible use of illegal software to manipulate emissions tests in Mercedes-Benz vehicles between 2008 and 2016. It said Daimler had sold over a million such cars in Europe and the U.S.[]

In May, Stuttgart prosecutors, who are working with authorities in the U.S,, conducted raids of 11 sites in Germany as part of a probe into Daimler and excessive diesel emissions. The searches were initiated in the course of investigations “against known and unknown employees at Daimler , who are suspected of fraud and misleading advertising connected to manipulated emissions treatment of diesel passenger cars,” the prosecutor’s office said at the time.

Did You Purchase A Mercedes Diesel (Model Years 2011-2014)?

If so, your rights under federal law may have been violated.  If you would like to speak privately with an attorney to contribute to or learn more about the investigation, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].

About Kehoe Law Firm, P.C.

The Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, negligence, false claims, deception, data breaches or whose rights to minimum wage and overtime compensation under the federal Fair Labor Standards Act and state wage and hour laws have been violated.